What is Celsius Network? (CEL Token)
Celsius Network — creator of the CEL Token and Celsius Wallet launched in late 2017 during the crypto ICO craze, releasing their Whitepaper (available here) in Q3 2017.
CEL token has seen an amazing run in 2020, with the token rising in value from just shy of 15c in January to $4.70 as of the end of December 2020 (an increase of 31x). In this time they’ve increased assets under management to over US$3.3b and are closing in on 300,000 Celsius members.
Celsius Network members have earned almost US$200m in interest to their Celsius wallets over the last 12 months alone. So with this said, just what is Celsius Network and what do they do?
What does Celsius Network do?
Simply put, Celsius Network allows members to either make money by earning interest on their cryptocurrency balances, or to borrow against their crypto collateral.
Earning Interest — is possible as Celsius pays depositors 80% of the profits they make through lending crypto out. Rates are far higher than traditional bank accounts due to the extremely skewed demand in the market to borrow crypto liquidity. More about the rates below.
Crypto Collateral — this allows depositors to borrow against their crypto, rather than selling (which can have huge tax benefits). Loans are usually overcollateralized, enabling Celsius to maintain an appropriate risk profile and ensure borrowers don’t end up having to provide too much additional collateral.
So… what about those interest rates?
Glad you asked! Celsius updates their reward rates weekly, so you know in advance how much interest you’ll earn on your tokens.
For example, if you deposit 1BTC, you have the choice to earn 4.74% APY in BTC, or 6.2% APY in CEL token. This means your 1BTC deposit would earn 4.74% or 6.2% over an entire year, or ~365 days.
With some rough back-of-the-napkin maths, each week you would earn interest each week of~0.09% in BTC or ~0.12% in CEL tokens. This creates incentive for users of the Celsius Wallet to earn in CEL token, rather than “in-kind” (the token that was deposited, BTC, or otherwise).
In order to get higher levels of interest, Celsius has loyalty levels based on the amount of CEL token within a wallet. If your total wallet balance is over 20% in CEL tokens, the highest rate of interest becomes available (in CEL tokens).
Celsius Flywheel
The Celsius Network Flywheel demonstrates (for illustrative purposes) the method by which Celsius makes a profit while encouraging increased adoption of the Celsius wallet and further boosting the tokenomincs of the CEL token using Metcalife’s Law (fundamental to growing a network).
Who created Celsius Network and the CEL token?
Celsius is the brainchild of Alex Mashinsky, a serial entrepreneur who among many other start-ups has founded;
- Arbinet (a commodity exchange for telco companies in the late 1990s)
- VoiceSmart (one of the first players in VoIP)
- Groundlink (an on-demand limo service, think Uber but for professionals)
- Q-Wireless (who were installing free WiFi across the USA)
- Celsius Network (Ethereum based lending and interest platform/wallet)
What the above shows is that Alex has been at the bleeding edge of technological change during his career and Celsius is no exception. Alex has plenty of skin in the game, holding just shy of 43m CEL tokens (with a value at writing in December 2020 of nearly US$200m).
He does weekly Q&A sessions with the community and values teaching financial literacy to those in the Celsius Network community, something that is a passion of his to bring more along this journey of financial freedom.
How do I sign up to Celsius?
Signing up is easy, and with a deposit of US$200 or more in tokens, Celsius throws in an additional $20 in BTC. They also do regular promo codes for BTC every few weeks (see bottom of this article for additional promo codes).
Use my referral code 1261298ea0 when signing up to earn a bonus US$20 in BTC when you transfer $200 or more!
Sign up here: https://celsiusnetwork.app.link/1261298ea0
Celsius Network Promo Codes (December 2020)
- TRUST (deposit $2,000 or more of any supported asset in the Celsius Wallet app to claim US$50 in BTC after 30 days).
- SANTA (deposit $500 or more of any supported asset in the Celsius Wallet app to claim US$25 in BTC after 30 days).
- WEB30 (deposit $200 or more of any supported asset in the Celsius Wallet app to claim US$30 in BTC after 30 days).
